Climb Global Solutions, Inc. Q4 FY2025 earnings call

• 2025 was an exceptional year with record results. In Q4, evaluated nearly 100 potential vendor relationships and signed with two, including Fortinet. Had second full quarter with Darktrace, 70 partners transacted over $13 million in Darktrace offerings. Announced acquisition of Interworks.cloud, a Greece-based cloud distributor, which will enhance cross-sell opportunities, deepen vendor and reseller partnerships, and be immediately accretive to earnings and adjusted EBITDA. Focus on accelerating organic growth, internal development of generative AI solutions, and pursuing accretive M&A.

In the fourth quarter of 2025, gross billings increased 3% to $625.4 million. Distribution segment gross billings increased 4% to $602.3 million, and solution segment gross billings remained flat at $23.1 million. Net sales in the fourth quarter increased 20% to $193.8 million. Gross profit was $29.8 million compared to $31.2 million in the prior year quarter. Selling general and administrative expenses were $18.2 million compared to $17.1 million. Net income remained flat at $7 million. Adjusted net income was $7 million. Adjusted EBITDA was $13 million compared to $16.1 million. Effective margin was 43.6% compared to 51.5%. Cash and cash equivalents were $36.6 million as of December 31, 2025, working capital increased by $27.7 million, and the board suspended the quarterly cash dividend beginning in Q1 2026.

• Remain focused on accelerating organic growth. Internal team building generative AI solutions. Continue to pursue accretive M&A opportunities to strengthen vendor portfolio and expand geographic footprint. Strong liquidity position provides flexibility for organic and inorganic growth. Believe initiatives, disciplined execution, and strong balance sheet will enable delivery of organic and inorganic growth objectives in 2026.

• Q: Keith Hosman asked about scope of large prior year acquisition and year-over-year performance without it, and impact of Citrix departure.

A: Removing large transaction in Q4 2024, recurring and organic growth was high teens in Q4 2025. Citrix had residual impact, but team picked up new vendors and filled the hole. - Q: Vincent Cagliuccio asked about growth broad-based across top 20 on organic basis and lumpy deals.

A: No lumpy deals in quarter, growth across vendors, top 20 make biggest impact. - Q: Bill DeZellum asked about Fortinet relationship size and potential, Citrix comps, and Vast and Supermicro deal.

A: Fortinet has $2.5 billion addressable market in US, looking to get 10% in 18 months. Citrix change led to strong comps in future quarters. Vast and Supermicro deal is good as it speeds up delivery cycle. - Q: Howard Root asked about M&A valuation, dividend elimination, and profitability.

A: M&A in 7 - 9 range, dividend eliminated to pursue larger acquisitions, focus on efficiencies and using AI to improve profitability.